Bank resolution is the process by which a bank or other financial institution is dealt with when it is no longer able to meet its obligations to creditors and customers. It may involve the closure of the bank, restructuring of its liabilities, or a combination of both.
Resolution planning is a set of strategies that a bank or other financial institution puts into place to prepare for potential financial difficulties or insolvency. It is designed to ensure that in the event of a bank failure, the institution’s assets and liabilities are adequately protected and managed in an orderly fashion. Bank resolution plans are intended to minimize the disruption to customers and the financial system and to minimize losses to creditors and investors.